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Fed slows down rate hikes amid early signs of inflation easing

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The Federal Reserve on Wednesday issued its smallest interest rate hike since June as the central bank attempts to curb high inflation without derailing a surprisingly resilient economy.

After issuing four straight rate hikes of 0.75 percentage points earlier in the year, the Fed's less aggressive Wednesday increase marks a turning point in its battle with high inflation.

Fed leaders are on track to keep interest rates high until inflation is finally quashed for good.

"What¬†we're¬†writing¬†down¬†today¬†is¬†our¬†best¬†estimate of what we¬†think¬†that¬†that¬†peak¬†rate¬†will¬†be¬†based¬†on what we know,"¬†Powell¬†continued,¬†adding¬†that¬†if inflation data "Come¬†in¬†worse,¬†that¬†could¬†move¬†up.¬†It could move down¬†if¬†inflation¬†data softens.‚ÄĚ

Fed officials are attempting to balance promising signs of inflation slowing with concerns about a strong economy spurring it higher.

The annual inflation rate as measured by the consumer price index fell to 7.1 percent in November from 7.7 percent in October, according to data released Tuesday by the Labor Department.

With inflation still high, Fed officials have been reluctant to ease up on interest rate hikes, which are meant to reduce inflation by slowing the economy.

While Fed's rapid rate hikes have triggered a severe slowdown in the housing sector and a decline in stock values, the rest of the economy has held strong.

Many economists are still fearful that the combination of higher interest rates, slowing growth abroad and delayed impacts of Fed rate hikes will tip the U.S. into recession if the Fed doesn't relieve some pressure on the economy.

The FOMC's median estimate of the December 2023 unemployment rate was 4.6 percent, up from a September estimate of 4.4 percent and much higher than the November 2022 jobless rate of 3.7 percent.


Source: https://thehill.com/policy/finance/3775148-fed-slows-down-rate-hikes-amid-early-signs-of-inflation-easing/amp/

Edited by gagajandro25
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Popster to Popster 3,456
On 12/15/2022 at 10:56 AM, Dean Spookchester said:

I thought it said Fad

dean winchester spn GIF

Screaming, it's been days that I keep reading 'Fad' as well in the title and I just entered to say it :icant:


  • lol 2
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